ALEXANDRIA, Va. – NCUA declared that its Temporary Corporate CU Share Guarantee Program, enacted to stem an outflow of funds from corporate credit unions, will cover accrued dividends posted before the failure of any corporate participating in the program.
"Dividends that have been accrued and posted in a period before the date of liquidation (which is when insurance and the share guarantee become payable) are treated as principal and would be fully covered under the (program)," said Mark Treichel, acting director of NCUA’s Office of Corporate CUs, in a recent legal opinion letter obtained by The Credit Union Journal.
Under the temporary guarantee program, which follows the guidelines of Part 745 of NCUA’s Rules and Regulations, dividends that have been accrued but have not yet been posted to the member’s account as of the date of liquidation are not guaranteed under the program, Treichel.
The letter was sent to all state credit union regulators, the Association of Corporate CUs, CUNA, NAFCU and NASCUS.
